Ethiopia has been making efforts to transform its economy from being mainly agricultural-based to becoming a more diversified economy with a focus on industrialization. The manufacturing sector is a key component of this strategy, and the government has been implementing policies to attract investment in the sector.
Manufacturing industries in Ethiopia are mainly concentrated in a few localities. Most of the establishments are found in three areas these are:
a. The Addis Ababa- Dire Dawa line:
b. The kombolcha – Adwa line
c. The Bahardar area
The concentration of the country‟s manufacturing‟s along these lines or areas could be due to:
I. The prior establishment of power lines and transportation lines
II. Proximity to ports (Assab and Djibouti)
III. Government decisions to create growth centres (poles).
Types of Industries in Ethiopia
The traditional/cottage industries
include weaving, pottery, wood carving, block smith etc
Serves as a ground for the expansion of modern industries.
Its advantages are:
require less amount of capital
depend on local markets and raw materials
provide job opportunity for jobless agricultural population,
promote the emergence of urban centers, demand less skilled man power.
Modern manufacturing industries
- Use advanced technology when compared to cottage industries, capital intensive, need more skilled manpower, consume more power per energy, required scientific management etc
Industrial group: food, beverages, tobacco, textiles, wearing apparel, foot wear, wood and wood products, furniture, paper and paper products, chemicals, rubber, plastic, glass etc ………
Food manufacturing industries account the largest in number and the second largest in holding employees.
The textile manufacturings take the leading in number of employees.
Addis Ababa alone accounts for about 44.4 % followed by Oromia region (37.7%) in regional distribution of manufacturing output. The Amhara regional state, the second most populous region accounts only 7.6% and
SNNP only 4.9%
Problems of Industrialization in Ethiopia:
- Weak inter-sectional linkages
- heavy dependently on foreign technology
- low infrastructure facilities
- lack of the required national capital
- lack of coherent and clear industrial policy etc